Key Results of The Chronicle’s Annual Survey and How It Was Compiled

More than $406.9-billion is held in the endowments of 268 of the nation’s major foundations,

universities, and other nonprofit organizations, according to the fourth annual study of endowments conducted by The Chronicle of Philanthropy.

The organizations in the survey achieved a median investment return of 11.7 percent in their 2006 fiscal year, meaning that half the groups surveyed achieved returns greater than that figure and half had smaller or negative returns.

Of the 261 organizations that provided investment data for the past two years, the median growth of returns was 11.9 percent at organizations whose fiscal year ended on June 30.

The median growth of returns was 66.5 percent at groups whose fiscal year ended on December 31, a result of the 6.8-percent increase in the Dow Jones industrial average from October to December of last year. In 2005, the industrial average for that same time period grew by just 1.4 percent.

The amount held in endowments shows the financial muscle of the nation’s big nonprofit organizations. The total market value of the endowments on this year’s list exceeds the gross domestic product of Thailand and Portugal combined.

The Robert W. Woodruff Foundation, in Atlanta, whose endowment was worth $2.2-billion last year, attained the biggest percentage increase in its investment performance of any organization in The Chronicle’s survey.

The foundation’s investment return was 21.4 percent in 2006, compared with 0.1 percent in 2005.

J. Lee Tribble, the foundation’s treasurer, credited the organization’s 2006 gains to a robust stock market and the strong market performance of Coca-Cola Company stock, in particular.

Of the 92.3 percent of the foundation’s endowment that is invested in stocks, almost 85 percent is invested in Coca-Cola stock.

The Woodruff Foundation’s unusually heavy reliance on Coca-Cola stock harkens back to the 1985 death of its founder, Robert W. Woodruff, the president of Coca-Cola, who bequeathed a significant amount of stock to the foundation when he died.

Big Gainers

Among other organizations that earned big gains in the value of their endowments was the Children’s Hospital Foundation, in Denver, whose endowment grew to $113.1-million in 2006 from $43.7-million in 2005.

Steve B. Warnecke, the foundation’s chief financial officer, attributed part of the gain in 2006 from returns of almost 20 percent, but said the increase was primarily from donations raised through the foundation’s capital campaign, which in 2001 began a six-year effort to raise money for a new medical facility and hospital programs.

The foundation originally wanted to raise $250-million through the campaign.

By the end of 2006, it had raised $233-million and now hopes to surpass its original goal.

The money raised came from individuals, foundations, and businesses, said Mr. Warnecke.

The largest donation to the campaign was a gift of $5-million from a family Mr. Warnecke declined to name, but most of the money came through donations of $100 or less.

Mission to the World, a Presbyterian missionary organization in Lawrenceville, Ga., saw its endowment grow to $11.1-million in 2006 from $7.2-million in 2005.

The organization benefited when a philanthropist who established a donor-advised fund at the organization in 1984 decided last year to take approximately $1.8-million that had been sitting in the fund over the years and direct it toward the organization’s endowment, said Roger Kooistra, the charity’s chief financial officer.

The group also earned close to $1.4-million from investment income last year, and received a $700,000 bequest that came through the Presbyterian Church of America Foundation, in Lawrenceville, Ga.

For the third consecutive year, the biggest endowment on the list was held by the Bill & Melinda Gates Foundation, in Seattle, with $33-billion in assets, followed by Harvard University with $29.2-billion, and Yale University at $18-billion in assets.

When groups were ranked by their charitable missions, the Ludwig Institute for Cancer Research, in New York, held the wealthiest endowment of all health charities on the list, with $1.3-billion in assets.

Of the Jewish federations that participated in the survey, the Jewish Federation/Jewish United Fund for Metropolitan Chicago had the largest endowment, valued at $981-million.

Tracking Decreases

Endowments at 98 percent of the organizations on the list grew last year, but a few groups saw their endowments shrink slightly.

The endowment of the New York City Opera dropped by 13 percent — the steepest decline on the list — to $54.4-million last year.

Another organization, Compassion International, in Colorado Springs, fell by 9.4 percent, the second-largest drop, to $10.7-million last year. Officials from New York City Opera and Compassion International did not return calls requesting a comment about the decrease in their endowments.

Nonprofit organizations are not required by law to disclose information about their endowments, so to determine the size of their holdings, and learn more about how nonprofit groups manage their money, The Chronicle sent questionnaires to 445 nonprofit organizations.

Figures for the market value of endowments at four institutions that appear in the survey — Case Western Reserve University, Indiana University and Foundation, New York University, and Pennsylvania State University — were taken from the 2006 National Association of College and University Business Officers Endowment Study, because those universities declined to provide The Chronicle with information about their endowments.

Another organization, the Robert R. McCormick Tribune Foundation, in Chicago, appears in the survey with incomplete information.

The foundation, whose endowment was valued at $1.1-billion in 2005, did not provide 2006 figures for the value of its endowment, its investment return, and its total expenses.

Officials at the foundation declined to provide estimates, and said they did not want to release those figures because the institution has not yet filed its Form 990 informational tax form with the Internal Revenue Service.

Most of the groups either had participated in the endowment survey in previous years or were included in the Philanthropy 400, The Chronicle of Philanthropy’s annual list of nonprofit organizations that raise the most money.

The newspaper also sought data from 50 colleges and universities with the largest endowments according to the National Association of College and University Business Officers, in Washington.

In previous endowment surveys, The Chronicle asked nonprofit groups to provide a figure for their operating budget. This year, in an effort to avoid ambiguity, The Chronicle asked groups to instead provide the figure for their total expenses from their Form 990 or Form 990-PF, the informational tax returns they file with the Internal Revenue Service.

The figure requested includes, in most cases, administrative costs, employee compensation, fund-raising costs, grants distributed, payments to affiliates, and program costs, among other expenses.

A searchable database of endowment information, including data from the previous years in which the survey was conducted, is available online. Go to http://philanthropy.com.

The endowment survey was compiled by Maria Di Mento, with assistance from Noelle Barton, Heather Joslyn, Sam Kean, and Peter Panepento.